Correlation Between Assystem and Lisi SA

Can any of the company-specific risk be diversified away by investing in both Assystem and Lisi SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Assystem and Lisi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assystem SA and Lisi SA, you can compare the effects of market volatilities on Assystem and Lisi SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Assystem with a short position of Lisi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assystem and Lisi SA.

Diversification Opportunities for Assystem and Lisi SA

0.84

Correlation Coefficient

Assystem  Lisi SA

Very poor diversification

The 3 months correlation between Assystem and Lisi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Assystem SA and Lisi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisi SA and Assystem is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Assystem SA are associated (or correlated) with Lisi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisi SA has no effect on the direction of Assystem i.e., Assystem and Lisi SA go up and down completely randomly.

Pair Corralation between Assystem and Lisi SA

Assuming the 90 days trading horizon Assystem SA is expected to generate 3.04 times more return on investment than Lisi SA. However, Assystem is 3.04 times more volatile than Lisi SA. It trades about 0.3 of its potential returns per unit of risk. Lisi SA is currently generating about 0.19 per unit of risk. If you would invest  3,710  in Assystem SA on October 7, 2024 and sell it today you would earn a total of  820.00  from holding Assystem SA or generate 22.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Assystem SA  vs.  Lisi SA

Assystem SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assystem SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Assystem is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lisi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lisi SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Assystem and Lisi SA

The main advantage of trading using opposite Assystem and Lisi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assystem position performs unexpectedly, Lisi SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lisi SA will offset losses from the drop in Lisi SA's long position.

The idea behind Assystem SA and Lisi SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.